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Compass
(LSE:CPG)
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Rating:75Outperform
Price Target:
$37.00
▲(22.15% Upside)
Action:Upgraded
Date:05/20/26
Overall score reflects solid fundamentals and an upbeat earnings update: strong cash flow and balance-sheet stability, plus raised guidance and strong new business wins, are the biggest positives. Technicals are supportive with price above key moving averages and positive MACD. Valuation adds support via a low P/E and a moderate dividend yield. The main risks weighing on the score are the recent revenue decline in the financial statement summary and near-term headwinds cited on the call (elevated leverage vs target, retention/volume softness, and inflation risk).
Positive Factors
Strong cash flow conversion
Consistently strong operating and free cash flow supports durable self‑funding of operations, dividends, technology investment and M&A. Reliable cash conversion reduces refinancing risk, enables disciplined capital allocation and provides a buffer through economic cycles over the next 2–6 months.
Negative Factors
Recent sharp revenue decline
An 18% revenue drop is a meaningful structural headwind that can pressure margins, utilization and client retention. Even with recovering bookings, restoring prior revenue trends may take multiple quarters and constrain EPS and cash flow upside until volumes normalize.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash flow conversion
Consistently strong operating and free cash flow supports durable self‑funding of operations, dividends, technology investment and M&A. Reliable cash conversion reduces refinancing risk, enables disciplined capital allocation and provides a buffer through economic cycles over the next 2–6 months.
Read all positive factors
Compass (CPG) vs. iShares MSCI United Kingdom ETF (EWC)
Market Cap
$53.92B
Dividend Yield2.16%
Average Volume (3M)2.74M
Price to Earnings (P/E)26.4
Beta (1Y)0.44
Revenue Growth10.63%
EPS Growth37.99%
CountryUK
Employees590,000
SectorConsumer Cyclical
Sector Strength84
IndustryRestaurants
Share Statistics
EPS (TTM)1.20
Shares Outstanding1,700,442,400
10 Day Avg. Volume2,312,330
30 Day Avg. Volume2,736,327
Financial Highlights & Ratios
PEG Ratio10.50
Price to Book (P/B)7.18
Price to Sales (P/S)1.16
P/FCF Ratio18.37
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$40.71Price Target Upside34.41% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering11
EPS Forecast (FY)1.48
Revenue Forecast (FY)$50.65B
Compass Business Overview & Revenue Model
Company Description
Compass Group PLC is a global provider of food and diverse support services, with operations spanning North America, Europe, and various other international regions. Its comprehensive suite of offerings includes facility management such as hospita...
How the Company Makes Money
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Compass Earnings Call Summary
Earnings Call Date:May 11, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 24, 2026
Earnings Call Sentiment Positive
The call conveyed strong underlying operational performance and clear strategic progress: double-digit operating profit growth, raised guidance, robust new business wins, margin expansion, disciplined cash and capital deployment, and active technology and GPO-driven procurement initiatives. Short-term headwinds include a slightly soft Q2 net new due to weather-related mobilization delays, modest volume growth, some retention volatility in the quarter, elevated leverage from recent acquisitions and inflation risks tied to geopolitical developments. Management presented confident medium- to long-term visibility (net new 4%–5% target, market expansion to 2035) and articulated concrete levers to drive margins and growth, suggesting the positives materially outweigh the near-term challenges.Positive Updates
Strong Profit and Revenue Growth
Operating profit increased 12% to more than $1.8 billion; revenue rose 9% with organic growth just over 7%; earnings per share up 12% in constant currency.
Negative Updates
Quarterly Net New Softness and Mobilization Delays
Net new business growth in Q2 was just under 4%, modestly impacted by adverse weather in North America which delayed mobilizations at several client sites and reduced quarterly net new cadence.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Profit and Revenue Growth
Operating profit increased 12% to more than $1.8 billion; revenue rose 9% with organic growth just over 7%; earnings per share up 12% in constant currency.
Read all positive updates
Company Guidance
Guidance was upgraded: the group now expects operating profit growth above 11% on a constant‑currency basis, driven by around 7% organic revenue growth, about 2% profit contribution from M&A and ongoing margin expansion (H1 margin +20bps). H1 highlights underpinning this include revenue +9% (organic just over 7%, acquisitions +1.5ppt), operating profit +12% to >$1.8bn, EPS +12% in constant currency, operating cash flow +14%, new business wins +14% to $4.1bn (LTM net new 4.2%) and a target net new range of 4–5% for 2026. Other financial guideposts: CapEx ~3.5% of revenue (H1 3.4%), full‑year interest expense ~ $350m (H1 $166m), effective tax rate ~25.5%, dividend payout ~50% and target leverage 1.0–1.5x (H1 1.7x).Compass Financial Statement Overview
Summary
Income Statement
65
Positive
Balance Sheet
70
Positive
Cash Flow
75
Positive
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 48.55B | 47.48B | 55.05B | 31.03B | 25.51B | 17.91B |
| Gross Profit | 18.89B | 3.15B | 18.25B | 22.40B | 1.48B | 962.00M |
| EBITDA | 5.03B | 4.53B | 4.00B | 2.74B | 2.35B | 1.28B |
| Net Income | 2.04B | 1.93B | 1.40B | 1.31B | 1.11B | 357.00M |
Balance Sheet | ||||||
| Total Assets | 29.77B | 26.70B | 24.35B | 21.48B | 18.75B | 14.87B |
| Cash, Cash Equivalents and Short-Term Investments | 523.00M | 574.69M | 623.00M | 1.03B | 1.99B | 1.84B |
| Total Debt | 9.13B | 6.99B | 5.91B | 5.27B | 5.04B | 4.48B |
| Total Liabilities | 21.70B | 18.94B | 17.44B | 15.18B | 12.84B | 9.95B |
| Stockholders Equity | 7.95B | 7.65B | 6.83B | 6.26B | 5.87B | 4.89B |
Cash Flow | ||||||
| Free Cash Flow | 3.01B | 2.99B | 2.23B | 1.83B | 1.31B | 943.00M |
| Operating Cash Flow | 3.64B | 3.55B | 3.24B | 2.54B | 1.60B | 1.17B |
| Investing Cash Flow | -3.31B | -2.58B | -1.59B | -1.23B | -874.00M | -769.45M |
| Financing Cash Flow | -561.27M | -1.07B | -1.94B | -2.58B | -693.00M | -153.89M |
Compass Technical Analysis
Positive
30.29
Price Trends
32.10
Positive
30.61
Positive
30.68
Positive
Market Momentum
0.05
Negative
55.24
Neutral
62.03
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:CPG, the sentiment is Positive. The current price of 30.29 is below the 20-day moving average (MA) of 31.70, below the 50-day MA of 32.10, and below the 200-day MA of 30.68, indicating a bullish trend. The MACD of 0.05 indicates Negative momentum. The RSI at 55.24 is Neutral, neither overbought nor oversold. The STOCH value of 62.03 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:CPG.
Compass Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $53.92B | 26.43 | 26.12% | 2.26% | 10.63% | 37.99% | |
69 Neutral | £773.08M | 15.25 | 15.81% | 1.50% | 5.39% | -3.64% | |
67 Neutral | £374.96M | 18.31 | 5.14% | 2.80% | 5.71% | -19.77% | |
65 Neutral | £1.64B | 8.90 | 6.41% | ― | 2.96% | 9.30% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
58 Neutral | £322.81M | 4.45 | 9.30% | ― | -0.52% | 68.53% | |
58 Neutral | £1.52B | -54.60 | -65.76% | 2.30% | 4.58% | -24.15% |
* Consumer Cyclical Sector Average
GB:CPG
Compass
32.52
-2.05
-5.94%
GB:FSTA
Fuller Smith & Turner
718.00
153.30
27.15%
GB:MARS
Marston's
50.90
9.15
21.92%
GB:MAB
Mitchells & Butlers
283.00
12.00
4.43%
GB:SSPG
SSP Group plc
209.60
44.91
27.27%
GB:JDW
J D Wetherspoon
814.50
104.62
14.74%
Compass Corporate Events
Business Operations and StrategyFinancial DisclosuresM&A Transactions
Compass Group lifts earnings outlook as new business surges in fragmented food services market
Positive
Jul 21, 2026
Compass Group reported another robust third quarter, with organic revenue rising 7.1% and net new business growth accelerating into its 4–5% target range, underpinned by a 96% client retention rate. North America benefited from Football Worl...
Business Operations and StrategyDividends
Compass Group Sets Sterling Rate for Interim Dividend Using FX Forwards
Neutral
Jul 14, 2026
Compass Group PLC has confirmed the sterling equivalent of its previously declared interim dividend for the financial year ending 30 September 2026, underscoring its global approach to shareholder distributions across currencies. The group provide...
Regulatory Filings and Compliance
Compass Group Updates Share Capital and Voting Rights as of 30 June 2026
Neutral
Jul 1, 2026
Compass Group PLC reported that its issued share capital at 30 June 2026 comprised 1,785,403,977 ordinary shares of 11 1/20 pence each, with 1,700,442,428 of these admitted to trading and 84,961,549 held in treasury. The total number of voting rig...
Regulatory Filings and Compliance
Compass Group Updates Share Capital and Voting Rights as of May 31, 2026
Neutral
Jun 1, 2026
Compass Group PLC has confirmed that, as of May 31, 2026, its issued share capital comprises 1,785,403,977 ordinary shares, of which 1,700,442,139 are admitted to trading and 84,961,838 are held in treasury. The treasury shares carry no voting rig...
Business Operations and StrategyDividendsFinancial DisclosuresM&A Transactions
Compass lifts profit guidance after strong first half and European expansion
Positive
May 11, 2026
Compass Group reported a strong first half to 2026, with revenue rising 9% on a constant-currency basis to $25bn and underlying operating profit up 12%, lifting its underlying margin to 7.4%. Organic revenue grew 7.2% on the back of 96% client ret...
Regulatory Filings and Compliance
Compass Group Updates Share Capital and Voting Rights as of 30 April 2026
Neutral
May 1, 2026
Compass Group PLC has reported that, as of 30 April 2026, its issued share capital comprises 1,785,403,977 ordinary shares, of which 1,700,442,139 are admitted to trading and 84,961,838 are held in treasury with suspended voting rights. The compan...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.